Business-record and income-tax book



H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BOOK.

APPLICATION FILED FEB. 7, i920. 1 3.5 O 8 54 Patented Aug. 24,- 1920.

5 SHEEIS-SHEE] l.

H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BooK.

APPLICATION FILED FEB- 1920. .V 1,350,854. Patented Aug. 24, i920.

5 SHEETS-SHEET 2.

Patented Aug. 24, 1920. 5 SHEETS-sH/EET s. V

H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BOOK.

APPLICATION msu FEB. 1920.

Hl. e. CARTER. BUSINESS RECORD A-ND INCOME TAX BOOK. V APPLICATION FILEDFEB. 7. 1920. y Iy. Patentd Aug. 24, 1920.

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susmsss RECORD AND INCOME TAX BooK.

AFPUCATION FILED FEB. 7 1920.

Patented Aug. 249 192i?.

UNITED STATES PATENT OFFICE.

HARRY G. CARTER, OF NOR'IHFIELD, NEW HAMPSHIRE.

BUSINESS-RECORD AND INCOME-TAX BOOK.

.Application iled February 7, 1920. Serial No. 356,960.1..

To all whom 'it may concern.'

Iie it known that I, HARRY Gr. CARTER, a`

i citizen ofthe United States, residing at Northfield, inthe county ofMerrimack and State of New` Hampshire, have invented certain. new anduseful Improvements in Business-Record and Income-Tax Books, of whichthe following is a specification. i

The primary object of my invention is the provision of a book forkeeping accounts of merchants by which the merchant isv provided with asimple and practical method ofassembling certain essential'statisticspertaining to the conductrand condition of his business, and in suchmanner as will enable him" to review at weekly intervals its progressand status from all essential aspects.

Another object whereby the weekly accounts can be assembled to providean annual recapitulation of the years business. Y

A further object is the provision, of columns for the arrangement oftherecapitulation data in such a way that the same may be convenientlytransferred toa sheet having a form similar tot-he United StatesGovernment income tax return.

The sheets of my book are related to each other and each of the columnswhich does not contain original entries, has a reference to the columnfrom which its data is taken.

A. brief description of the preferred embodiment of my invention and itsuse is as follows:

The account sheets of the book are of four different kinds. The firstsheet contains the mechandise account in two sets of columns, one setfor the merchandise received according to the invoices, and the otherset for the invoices settled. In my 4preferred embodiment one of thesemerchandise account sheets is provided for each week of the year. Titheach merchandise account sheet is a second companion sheet containingthe summary of the first sheet by columns, Accounts payable, Merchandisestock on hand, Record of sales, Accounts receivable, Cash account, Cashdrawn by owners, Profit and loss count. The third sheet is arccapitulation sheet for the year on which is entered the totals fromthe accounts on the respective second sheets, one line being providedfor is the provision of means the summaries of each weeks accounts,there being fifty-two (52) such lines on the page and a footing linebelow giving a summary for the entire year. `The headings of the columnson this sheet are arranged in groups, the merchandise and cash accountsbeing in one group, the expenses deductible for income tax return inanother group, and the expenses not deductible for income tax return ina ythird group. The fourth sheet contains the accounts which are made upat the end -of each year such as weekly prorata of overhead expense,summary of inventories, extract from income tax return, percentagestatistics. In addition the table giving the rate of income tax on netincome, is shown.

I c will now describe my invention inv detail.

Referring to the drawings `wherein the figures represent views of sheetsor portions of sheets having accounts thereon.

Figure l represents the merchandise account. 9

Fig. 2 represents the account lfor net merchandise received. i

Fig. 3 is the accounts payable.

Fig. I is the merchandise stocks on hand.

Fig. 5 is the record of sales.

Fig. 6 is the accounts receivable.

Fig. 7 is the cash account.

Fig. 8 Vis the account of cash drawn by owners.

Fig. 9 is the profit and loss account.

Fig. l0 is the recapitulation of business for the year. c.

Fig. 11 is the weekly pro-rata overhead expense. Y

Fig. 12 is the summary of inventories.

Fig. 13 is the extract from United States income tax return form 1040.

Fig. 14 is the percentage statistics.

Fig. l5 shows the rate of income tax on net income. f

merchandise is received into stock and checked by invoice the Adate ofinvoice,

name of dealer, consecutive number, grosson the right portion of thepage, the partial settlementsV or complete settlement being indicated by1P/S or C/S respectively.

The gross amount of the invoice, or that portion settled, should beentered in column 3 and deductions made under columns 4, 5,

6 and 7 where allowances are made forYV freight and express, merchandiseclaims,

merchandise returned or cash discount, respectively. The actualcash paidis entered in column S under Net amount paid. Obviously the sum oi' theamounts of columns 1, 5, 6, 7 and 8 should equal the entry in column 3.lWhen the invoice is paid by check the check numberv is entered in thelast column.

Then merchandise is received C O. D. or purchased for cash, entries aremade on both sides of' the `merchandise accountl in order to assureaccuracy of merchandise stock on hand, column12, Fig. 1, and merchandisereceived, column 9, Fig.

At the end of each week or whenever the account is closed for theparticular sheet of Fig. 1, the total of` column 3 should balance withthe sumfof the totals of columns 4, 5, G, 7 and 8. l Y I Referring to Fig. 2, Net merchandise received this week, the entry for column 9 inline 1, Merchandise received 1from dealers, is taken from the total atthe bottom ot column 1, as indicated on that line. Line 2, Merchandisereceived on account from customers, is used-for the entry of the totalamount of goods or produce which has been received for that week, onaccount from customers. In this laccount the market value of thecommodity isV used and not necessarily at the credit price allowed tothe customer. The merchandise delivered to `the customer in exchange forproduce or other commodity should be includedin Charge sales, column 15,Fig. G, ln thisV manner the profit on the Vtransaction is included inthe proiit and loss account and also appears in the annualrecapitulation oitl business, F 10, and the income tax return, Fig. 13.Line 3, the total of column Q for freight express and hauling is addedand the total extendedto column 10. Y

ln column 9 the items to be deducted as freight and expressv allowed,columnk 1; merchandise claims allowedf? columnr 5; merchandise returnedto dealers,`column 6, and cash discounts, column 7, are added and thetotal extended to column 10. The

vdifference is the, net merchandise received this week. l

chandise vreceived tor the weektaken from column 1, as indicated. Fromlthev total of theseutwoas, deducted the, merchandise bills settled fromcolumn 3, the diiiference being the net merchandise liability.

Referring to Fig. Li, the merchandise on hand is taken from column 12 ofthe previous week, the net merchandise received tiis week from column 10and the merchandise returned by customers, at cost, from column 13, aretotaled. From this total is deducted the merchandise sales for the week,at cost from column 13. The dijerence is 'the merchandise stock on handat close of week. i

ln Fig. 5, the record of sales is kept, the cash and charge sales, beingentered at the close of each days business for that day in columns 141and 15 respectively. In column 17 is entered the cash received onaccount for the day. The total cash and charge sales are entered incolumn 16 and from this total deduct the markup percent. of profit. Theresult is the approximate cost of merchandise sold and should be enteredin column 13, Cost of merchandise. At the end of the week the sales forthe week aretotaled and to this total the grand total sales figure atthe bottom of column 16 .of the previous week is added, which gives thegrand total sales to date. y

Fig. 6 shows the accounts receivable. The amount due from customers lastweek is obtained from column 19 of the previous week. To this is addedcharge sales for this week from column 15. Deductions are made for cashreceived on account tor week from column 17, discounts and allowances tocustomers, merchandise returned by customers, worthless (canceled)accounts and the diierence is the net due from customers this week.Eelow this is placed the net duo from customers last week and thedifference between these two shows the increasel or decrease over lastweek.

Fig. 7 shows the` cash account, On the debit side oi the account areadded, vtne bank balance brought forward from column 22 of thevprevifnis week, cash on hand from column 22 of previous week,

cash salesiior this week from column 14. cash received on account Athisweek from column 17, miscellaneous cash receipts this week (itemized).0n the credit side of the account are added net merchandise bills paidfor week taken from column S, expense items not pro-rated, cashdirai-.vn by owners from column 24, pro-rated d (overhead) expense77from column 23, better-ments, Fixtures and additional equip-y ment. Thetotal is the disbursement for the week. To this total added the bankbalance and cash onhand at end of week which gives the balance forcolumn Fig.. 8 shows the cash drawn by owners giving name and amountdrawn, the total to date of lastv week. is. entered under broughtforward77 to show the amount drawn to date by that person. This account,column 2/1- is used in the cash account to which reference has alreadybeen made.

F ig. 9 shows the profit and loss account. In column 25 the cost oi'merchandise sold from column 13 is deducted from the total sales forwenn from column which gives the gross proi'it joi' the week. rlhistotal is extended to column 25. From this is subtracted the total ofmerchandise returned by customers from column 18, discounts andallowances to customers from column 18, Worthless accounts (canceledthis week) from column 18, expense items (not pro-rated) from column 21,weekly prorated expense from column 28, Fig. 11. This gives the netmerchandise profit or loss for week, the profit being entered' in blackand the loss in red. Below this in column 26 is entered the cashdiscounts for the week from column 7. This is added ii there is a netprofit and subtracted from a not loss. `This total or difference givesthe total net profit or loss for Week. From this is deducted theproperty losses by fire, Hood, theft, etc. rlhe total net prolit or lossfrom last week, tal-zen from the bottom ot' column 26 is added whichgives the grand total net profit or loss to date.

Fig. 10 isthe` recapitulation of business for the year. This sheetcontains one line for eachinterval of time covered by the accounts ofFigs. 1 to 9. It the accounts oi Figs. 1 to A9 are closed eachvveelnthere will be lines in the recapitulation sheet of Fig. 10. It theaccounts of Figs. 1 to 9 are closed cach three days the recapitulationsheet will have 101ilines, and so on.

Referring `to the headings of Fig. 10 it` will be seen that the mainbheadings fall in three large groups. The irst group contains themerchandise and cash accounts, the second group contains the sellingeX-V penses, including all items Whichare deductible for income taxreturn. The third group contains the expenses which are not deductibleJfor income tax return. This groupingr of these itemshas specialrelation to the Unitedv States income tax return, a Vtorni similar towhich is included in my book and which will be later described.

Itis to be noted at the outset Ythat the columns of this sheet like theother columns and lines in my book which do not contain originalentries, have indicia giving Yinformation from where the amounts for theentr" are to be taken. At the end of each woei; or interval oit' timecovered by Figs. .1-

the ending of the week or other interval of time covered by the accountsof Figs. 1 to 9.

ln column A is entered the net cost of merchandise received for salewhich is taken from column 10, Fig. 2. Columns ll, C, l) and E cover themerchandise sales and entries are made from columns 16 and 18 forcolumns B, C and l) as indicated, the amount for entry in column E beingfound by deducting the total of columns C and D from column B. Column Fcarries the miscellaneous cash receipts which is taken from column 20opposite the line bearing that title in Fig. 7.

Columns G to lV covering the selling expenses which are deductible Jforincome tax returns are so arranged that the totals under these columnsmay be transferred conveniently and in order to the income tax return,Fig. 13, to be later described in its relation to these columns. It isalso to be noted that the arrangement of the items in Fig. 7 is suchthat the transfer of amounts from the cash account to Fig. 10 in columnsG to T is facilitated. In column U isplaced the total for the line incolumns to T. ColumnsV and lV carry the property losses from column 26and the Worthless accounts from column 18, respectively. f

Columns X, Y and Z 'carry the amounts oritems which are'Y not deductibleforincome tax return. rlhe 'amounts for these columns are obtained fromcolumn 2, Fig. 1, and column 22, Fig. 7, as indicated at the head oi'the column. The amounts'in column X are listed as non-deductible sincethey have already been deducted in colcharges during the year,` thetotals of column 28'will remain unchanged for weekly' entry to proiitand loss account, column 25, Fig. '9.

In Fig. 12, summary of inventories shows the difference between thevalues in' merchandise on hand at beginning oi year` and end ot year asshown by the inventories.

Fig. 13 shows a form similar to form 1040, United States income taxreturn with the addition ot indicia to denote where the amounts to beentered will be found. Referring to these by line number 1, Gross sales`and income from businessV services,

Uil

year, are found Jfrom Summary of in-A ventories, column 29, Fig. 12.l/Vhen these allowances are made we have in line 12 the net cost oit'goods sold. Line 16, Salaries and wages, is taken from column Gr, Fig.

10; line 17, Rent,77 is taken from column H, Fig. 10. Line 18, Intereston business indebtednessf7 is taken from column J, Fig. 10. Line 19,Taxes on business and busiess property,77 is taken trom column l;

lline 20, Repairs (trom column L, Fig.

10); lVear and tear (from column 27, Fig. l1) and Property losses Jfromcolumn V, Fig. 10); line 21, Bad debts arising from sales (from columnlll) line 22, Other expenses, are taken from columns M to T inclusiveFig. 10. rlhe total other business deduct-ions and net cost of goodssold taken from the gross sales and income from business services givesthe net income from business. Fig. 14 shows the percentage statistics otthe business. Referring now to Fig. 15 the normal tax and surtax may bedetermined from the table.

Since mistakes are liable to occur during transcribing, the fewer timestranscription takes place the fewer mistakes will arise from this cause.In order to bring about this result, I may print the form similar toform 1040 United States income tax return as shown in Fig. 13), the samesive and in the same proportions as the-regular Jform and provide acarbon sheet on the front or back of the sheet containing the form asshown in Fig. 13. By this means the form 1040 to be turned in to theinternal Revenuev Bureau may be made at the same time as the same formwhich is a part ot my book. Since the original should be turned in tothe Government, l prefer to have the carbon above that part ot the pagecontaining the form as shown in Fig. 13. Attention is called to the factthat the carbon sheet, if used, may be folded back on itself oneor moretimes to have it out of the wayruntil needed and keep it from soilingthe sheet.

It the carbon paper is not desired, the information contained in the'form shown by Fig. 13 may be copied conveniently and directly to thecorresponding part of the income tax return form 1040.

lt will thus be seen that have lprovided a book for the keeping otaccounts wherein sheets are arranged for the keeping of accounts to beclosed at short intervals of time such as a week,other sheets to receivethe totals of suchaccounts in a line across the page, and having a lineJfor each week or short interval oi time in the year, this latter sheetforming a recapitulation sheet and having its columnsarranged in groupsso that the permitted deductions under the United States income taxreturn are made available for ready and easy transfer to the properplace in a toi-m similar to the income tax return form which also formsa part of the book.

lt is equally clear that I have provided such a system wherein theplaces ot entry which are not for original entries contain references tothe places in the book where the amounts for the entries may be found.

lilhile describe and claim my invention as a book, l desire to have itunderstood that l do not limit myself to a permanently bound book, sincea loose leaf book can as well be used in connection with my invention. v

l also desire to have it understood that while have described 'myinvention as being;

applied to a condition where it is desirable to have the accounts ot'Figs. 1 to 9 closed each week, yet it is equally useful in conditionswhere it would be desirable to close these accounts at the end of ashorter or longer time. n this case, the number of lines on 10 couldrbemade greater or less than the 52 lines described. T his is tor thereason that one line oi2 Fig. V10 is devoted to each set ot accounts 1to 9 and there are enough lines to carry the accounts for a year.

l desire also to have it understood that while only one sheet isdescribed for Fig. 1 that it may be necessary to have many such sheets'to provide space for the merchandise account. for the length of time itis to run such as a Weel. 1t is further to be understood that while Fig.10 is described as a sheet, yet it may and probably will, extend overtwo pages and it may also be necessary to have other sheets to provideadditional lines as in the case of the use of my book in a business vinwhich it was found to be de- Y sirable to balance the accounts,illustrated in Figs. 1 tot), each three days. Obviously since 104 lineswould be too many for one sheet, more than one sheet could be used.

It is to be further understood that while my invention is particularlydescribed with relation to the present 'form 1040 income tai;A return,yet should the Governmenty change the arrangement ofitems on the incometax return, it would only be necessary to replace the presentform withthe new form and rearrange the columns of the recapitulation sheet andin turn the items in the cash account, Fig. 7, to make my book conformto any such new income tax return which might be adopted.

lVhile I have described the preferred form ot my invention in detail, Idesire to have it understood that modications and Pil) one of the groupshaving appropriate head-,-

ings for the entry of data for a short period of time, another of thegroups comprising a reczqiitulation of the accounts of the first lgroup, an income taX return form having indicia thereon denoting columnsin the recapitulation from which the data for the income tax return aretaken.

2. An` account book comprising correlated groups of accounts, theaccounts of one of the groups having appropriately designated lines andcolumns for the entry of data fora short period of time, another of thegroups comprising lines and columns for the recapitulation of theaccounts of the first group, an income tax return form, the columns inthe recapitulation which deal with expenses which are deducted under theincome tai; return being segregated, to facilitate transfer to theincome tax return form.

3. An account book comprising correlated groups of accounts,itheaccounts of one of the groups having appropriately designated lines andcolumns for the entryvof data for a short period of time, another of thegroups Comprising a recapitulation of the accounts of the first group,the columns in the recapitulation which deal with expenses which arededucted under the income tax return, being segregated to facilitatetransfer to the income taX return form, an income tax return form havingindicia Vreferring to the columns in the recapitulation from which theamounts to be entered are taken.

4. An account book comprising a series of groups of correlated accounts,the accounts of each group having appropriately designated lines andcolumns for entry of data for a short period of time, a recapitulationsheet having columns appropriately designated to receive the totals ofthe accounts closed at the ends of the short periods of time, an incometax return form having indicia thereon opposite the several items todenote the columns in the recapitulation sheet from which the amountsfor entry thereon are to be taken.

5. An account book comprising groups of 'correlated accounts, theaccounts of one group having appropriately designated lines and columnsfor the entry of data for a short period of time, a yearlyrecapitulation sheet having another group of accounts in appropriatelydesignated columns to indicate the place in the first group Where theamounts to be entered are to be found, there being lines on therecapitulation sheet for the entry of amounts under the appropriatecolumn headings and having indicia denoting the place in the first groupof accounts from Where the amounts of entry are to be taken, the groupof accounts on the recapitulation sheet being arranged in sub-groups,one of the sub-groups having its 'accounts arranged in substantially theorder of occurrence on the Government income tax return form. i

6. An account book comprising groups of correlated accounts, theaccounts of one of the groups having appropriately designated lines andcolumns for the entry of data for a short period of time, a yearlyrecapitulation sheet having another group of accounts in appropriatelydesignated columns to indicate the place in the first group Where theamounts to be entered are to be found, there being lines on therecapitulation sheet for the entry of amounts from the first group,under the appropriate column headings, there. being one such line foreach such short period of time for the year, the columns of therecapitulation sheet dealing with eX- penses which are deductible underthe income tax return being segregated to facilitate transfer to theGovernment income tax return.

y, 7. An account, book comprising appropriately designated lines andcolumns for accounts for a short period of time, recapitulation columnshaving indicia referring to the totals under the accounts for a shortperiod of time, yearly accounts having columns designated by indiciareferring to the totals under the recapitulation columns, the yearlyaccounts including a form, similar to that of the summary of business onthe income tax return, each column or line not for an original entryhaving indicia thereon giving information as to Where the entry for thatcolumn or line Will be found.

8. An account book comprising appropriately designated lines and columnsfor accounts for a short period of time, reca-A pitulation columnshaving indicia referring to the totals under the accounts for a shortperiod of time and having a line for the entry each said short period oftime of the accounts for that period, a yearly account hai/ing indiciasimilar to that of the summary of business of the income tax return,each column or line not for an original entry having indicia thereongiving informationas to Where the entry for that column or line will befound, the columns on the recapitulation sheet showing those eXn penseswhich are deductible for income tax return in one group and those whichare not deductible for income taX in another group.

9. An account book comprising columns for accounts for a short period oftime, recapitulation columns having indicia referring to the totalsunder the accounts for a short period of time and having a line for theentry each said short period of time of the accounts for that period, ayearly account having indicia similar to that on the summary of businessof the income tax return, each column or line not for an original entryhaving indicia thereon giving information as to where the entry for thatline will be found.

10. An account bookliaving a set of leaves suitably ruled andappropriately designated for the reception of data relative toInerchand-ise received and paid for, another set of leaves designated toreceive respectively and in succession, data for successive periods oftime, each leaf having appropriately designated spaces for the receptionof amounts of net merchandise received for the relatively short periodof time which this sheet is to be open, accounts payable covering thesame period of time, merchandise stock on hand7 covering the same periodoftime, record of sales having spaces for daily entry of cash and chargesales during the same period of time, .accounts receivable, cash accountand profit and loss account each covering the time dur-ing which theaccounts of the sheet are open, a recapitulation sheet havingappropriately designated columns and having a line for the reception ofdata from each corresponding pair of sheets from the first two sets ofsheets, the recapitulation sheet having a groupof columns for thereception of entries of expenses deductible under the income tax return,said columns being arranged vin order of appearance on a Governmentincome tax return form and designated in such a manner as to facilitatetransfer of the totals of such columns to said income tax return form.

l1. An account book comprising correlated groups of accounts, theaccounts of one of the groups having appropriate headings for the entryof data for a short period of time, another of the groups comprising arecapitulation of the accounts of the first group, an income taX returnform having indicia denoting columns -in the recapitulation from whichthe amounts of the entries for the income tax return are taken, a carbonsheet above the income tax return form whereby the Government form maybe placed over the form in the book and the carbon copy of the originalthereby retained in the book.

In testimony whereof I afiix my signature.

HARRY G. CARTER.

